I’m excited for our new lease at 424 N Highland. This is the fifth time we have this house up for lease; the first time was exactly 8 years ago. What draws people to this property every time is the resort-like backyard with pool, waterslide, jacuzzi, and waterfalls! The house is fully remodeled and it has 5 beds and 4.5 baths inside and a backhouse with 2 beds and 2 baths outside. Of course there’s a kitchen, living, dining, and family room besides. The floor plan is uniquely laid out so that the people in each of the bedrooms have privacy and space. Each time we put this house up for lease it leases quickly and no doubt this time it will be the same. We’re excited to show today between 1 pm and 4 pm!
We got an offer on a duplex this week from a buyer who said he’s at the end of a 1031 exchange and he needs to close in 3 days in order to qualify. And then he called back 2 hours later to say his lawyer told him he has another 120 days to close on a replacement property because people in Los Angeles get an extension on their exchanges. As a result of severe winter storms, flooding and mudslides that began in California on January 8, 2023, the IRS issued an extension of the 45- and 180-day deadlines for IRC §1031 exchange transactions. The extensions permit eligible persons who began an IRC §1031 exchange between July 12, 2022 and January 8, 2023, to extend the 180-day exchange period to the later of May 15, 2023 or 120 days after the original 180-day deadline date. I’ll look out for this buyer’s agent’s call (hopefully about a different property!) in 117 days from now. I wonder if there will be another extension for people in Los Angeles on 1031 exchanges as a result of the severe winter storm we’ve been having this weekend!
We got an offer on a different duplex where the buyers are putting down 5% and borrowing 95% on an FHA loan (from Guaranteed Rate) at a 6.15% interest rate. The lender said the loan limit is $1,399,500 and it’s only for owner occupiers who will live in one of the two units as their principal residence. The attraction to the buyers who are both high income earners, besides appreciation, is the tax implications. Living in a duplex and renting out the second unit means they can deduct their whole mortgage payment, property taxes, insurance and other expenses off of their tax returns – half because it’s below the deductible limit for a primary residence and the other half because it’s expenses toward an investment. The FHA product is attractive because it requires so little money down.
An agent on our team is in escrow with a buyer who is doing the “Mortgage 100” program at Bank of America. The buyer put zero money down and she’s borrowing 100% interest only at 5.5% interest. To qualify, the borrower needs to have assets with Merril Lynch equal to 30% of the purchase price and those assets get frozen, except to pay down the principal on the purchase loan. The borrower is paying less than $5k/month on her interest only loan and she has all her cash to make improvements and upgrades to her property.
A woman called me this week to share that she worked for 6 months with a very close family friend agent who showed her potential properties to buy. They saw many houses together, wrote offers (that weren’t accepted), and they spoke at length for months through all the parts and pieces of buying a house. Her close friend (agent) connected her to a talented loan guy, who ultimately informed the agent that the client bought a house without him. The buyer explained to me on the phone this week that she walked into an open house on her own and the stranger out-of-area listing agent told her that in order to successfully purchase the house (that was in a competitive multiple offer situation) she (the buyer) had to drop her agent and work directly with him, the listing agent. This buyer really wanted to buy the house and so she did as the listing agent suggested and she bought the house without her close friend (agent). One year later she has a house, but she no longer has her close family friend and that makes her sad. It is sad, but it’s a human question about relationships and friendships more than a real estate question. My thought is that friends who hurt friends, if they care enough and want the relationship, can empathize, communicate, appreciate another person’s position, and if they choose, make amends and work to restore their relationship.
I’m still feeling the warm fuzzies from the touching way all the people close to me celebrated my special day last week. I love to learn and to grow new skills, and I’m a foodie who loves the kitchen, and so it was incredibly fun to do a cooking class with close friends that ended with a very fresh herby gourmet lunch shared over warm uber fresh sourdough bread and an artistic dairy birthday cake decorated with all different decadent chocolates. I learned from Sam Sheff (his real name) that the lighter an eggplant feels when lifted, the less seeds there are inside of it (which makes it creamier), salad dressings with fresh herbs are best stored in the fridge without lemon juice (which browns the herbs), vegetables roasted with olive oil and sea salt at a low temperature get intensely sweet as they dehydrate, and most of all that laughter, love, and making people feel special is invaluable and all the way up there on the list of the best parts of life.
I can’t stop thinking about a spectacular off-market property I had the treat to explore this week! On a pillow in the backhouse was written a famous quote by Coco Chanel, “The best things in life are free. The second best are very very expensive.” I agree!
Have an awesome week ahead and don a cap if it starts to hail again!
Xoxoxo,
Sheri